How Do Search Engines Earn
Search Engines provide free and unlimited access to their services. So just where do the billions of dollars in search revenue come from?How Do Search Engines Earn? Search engines have multiple sources of income. First, there`s the inclusion fee that some search engines change website authors. Some impatient authors want a guarantee that their new site will be indexed soon(in a day or two) rather than in a month or two. When a spider finally gets to it in the to-be-crawled URL list. Search engines supply this their site be re-indexed on a more frequent, perhaps monthly basis.
Most search engines also generate revenue by selling profile data to interest parties. Search engines collect an enormous amount of user data on a daily basis. This data are used to improve the quality of search and predict user needs. But it is also sold in an aggregate form to various companies. For example, search engine optimization companies who are interested in popular query work or the percentage of searches that are commercial in nature can buy this information directly from a search engine.
While search engines do not sell access to their search capabilities to individual users, they do sell search service to companies. For example, Netscape pays Google to use Google search as the default search provided by its browser. At one point, Go To(which was bought by Overture, which is now part of Yahoo) sold its top seven results for each term to Yahoo and Alta Vista, who, in turn, used the seven results as their top result.
Some Figures to Understand Better
Despite these source of income, by far the most profitable ads fastest-growing revenue source for search engines is advertising. It is estimated that in 2017 $53.7 billion in search revenue will be generated from advertising. Google` s IPO filing on June 21, 2004 made the company `s dependence on advertising very clear: advertising accounted for over 97% of their 2003 revenue. Many search engines sell banner ads that appear on their homepage ads results page. Other sell pay-for-placement ads.
How Author/Website Earn
These controversial ads allow a company to buy their way to the top of the ranking. Many web analysts argue that these pay-for-placement ads pollute the search results. However, search engines using this technique(Go To is a prime example) retort that this method of ranking is excellent for commercial searches. Since recent surveys estimate that 15-30% of all searches are commercial in nature. The engine like Overture provides a valuable service for this class of queries. On the other hand, many searches are research-oriented, and the results of pay-for-placement engines frustrate these users.
How Money is made
Google takes a different approach to advertisements and rankings. They present the unpaid results in the main list while pay-for placement sites appear separately on the side as “sponsored links”. Google, and now Yahoo, are the only remaining companies not to mingle sored links. Companies choose a keyword associated with their product or service. Then they bid on a price they are willing to pay each time a searcher clicks on their link.
For example, a bike shop in Raleigh may bid 5 cents for every query on “bike Raleigh”. The bike shop is billed only for a searcher actually clicks on their ad. However, another company may bid 17 cents for the same query. The ad for the second company is likely to appear first because, although these there is some fine tuning and optimization, sponsored ads generally are listed in order from the highest bid to the lower bid.
Things To Understand
Cost-per-click advertising is an innovation in marketing. Small business who traditionally spent little on advertising is now spending much more on web advertising. Because cost-per-click advertising is so cost-effective. If a search clicks on the link, he or she is indicating an intent to buy, something that other means of advertising such as billboards or mail circulars cannot deliver. Interestingly, like many other things on the Web. It was only a matter of time before cost-per-click advertising turned into a battleground between competitors. Without protection(which can be purchased in the form of a software program) native companies buying cost-per-click advertising can easily be sabotaged by competitors. Competitors repeatedly click on the native company `s ads. Running up their tab and exhausting the company` s ads, running up their tab and exhausting the company `s advertising budget.